2018 Home Mortgage Disclosure Act (HMDA) Changes

The January 1, 2018 HMDA implementation date is fast approaching. The new rules announced in 2015 add 25 new data points to be collected. The number of new data points collected ends up being much more when accounting for the type of loan, number of borrowers, and how certain questions are answered. New data points are added for age, credit score, automated underwriting system information, unique loan identifier, property value, application channel, points and fees, borrower-paid origination charges, discount points, lender credits, loan term, prepayment penalty, non-amortizing loan features, interest rate, and loan originator identifier, among others. Institutions must report how information about the applicant’s/borrower’s ethnicity, race, and sex was collected. Institutions must also permit applicants to self-identify their ethnicity and race using disaggregated ethnic and racial subcategories. For profit lending institutions (other than a bank, savings association, or credit union) are subject to HMDA if they originated at least 25 mortgage loans or at least 100 covered open-end lines of credit in each of the two preceding calendar years and satisfy the existing location test. Beginning January 1, 2018, covered institutions must collect, record, and report information for approved but not accepted preapproval requests for home purchase loans. Lenders will need to obtain a legal entity identifier (LEI) and loans will be reported using a Universal Loan Identifier (ULI).

Recently proposed “technical” revisions are also effective in 2018. They attempt to address how lenders report loans already in process, give that they may lack data that was not required or uncollectable at application. Key terms such as “temporary financing” and “automated underwriting system” are clarified. Revisions also establish transition rules for reporting certain loans purchased by financial institutions.